Wednesday, November 12, 2014

What Happens in Vegas: Caesars Filing for Bankruptcy?

Several years ago, the big casinos on the Las Vegas Strip started consolidating. Very quickly, they pretty much came to be two gigantic companies, Caesars Entertainment and MGM/Mirage. There are exceptions, but not many. And of course, these two gigantic companies own and/or operate casinos and resorts all over the country and around the globe. But are casino companies too big to fail?

Apparently not. As hard as it is to believe that a business centered on mostly casinos--where the game is always tilted toward the house--could possibly fail. But given that it can, it ought to be a lesson for the rest of corporate America: your colossal corporations--formed by decades of unchecked consolidation--could fall victim to the same thing. I for one would be very excited to see some of the consolidated businesses in many industries be trust-busted, like we used to do. We could start with the media.

I'm so sorry, sire!

[Excerpt]Caesars, Creditors Said to Have Deal on Unit’s BankruptcyCaesars Entertainment Corp. (CZR) reached an agreement with key senior creditors on the outline of a debt restructuring plan that includes a prearranged bankruptcy for its largest unit as soon as January, according to two people with knowledge of the negotiations.
Under the plan being negotiated by first-lien bondholders including Paul Singer’s Elliott Management Corp. and Pacific Investment Management Co., the casino company would put its Caesars Entertainment Operating Co. unit into Chapter 11 proceedings as soon as Jan. 14, said the people, who asked not to be identified because the discussions are private. . .